The Ukraine War has shown that relying on foreign countries to produce key materials can be a risky plan. Unfortunately, the US currently imports over 50% of 31 out 35 key battery minerals.

With electric vehicles surging in popularity, demand for those battery-making minerals is higher than ever.

That’s why President Joe Biden is expected to announce soon that he is invoking an existing defense law, the Defense Production Act, to give American companies access to funding that they can then use to improve existing operations and increase productivity.

The Biden Administration hopes that including key minerals in the items covered by the act will help boost production here in the US and Canada and decrease US dependence on foreign suppliers.

The Russia-China Reliance Problem …

Currently, the US receives most of its battery minerals from two countries – Russia and China, neither of which is exactly a close “friend” to the US.

To make matters even more precarious, while the US imports approximately 80% of its Rare Earth metals (REEs) from China, it also imports the remaining amount through other countries that China sources.

Reliance on foreign countries like China could be a big problem for the US in the future, according to Ruth Demeter, the Senior Director of Policy for the Global Energy Institute at the US Chamber of Commerce.

In an article published at GlobalEnergyInstitute.org, she wrote “The war in Ukraine and sanctions imposed against Russia have once again underscored the precarious nature of America’s growing dependence on critical minerals—and lack of homegrown supply.”

Reducing Reliance

If Biden includes key minerals under the Defense Production Act that will produce a renewed focus on mining efforts in both the US and Canada, that means microcap companies with solid foundations could see their growth really take off.

Here are some companies to keep an eye on going forward:

Ameriwest Lithium (AWLIF) –
An expert survey from the reputable organization, The Fraser Institute, found the Nevada Desert was #1 out of 77 rated lithium mining spots. One company with a strong presence in the Nevada Desert that could see strong growth as domestic production of lithium ramps up is Ameriwest Lithium. It had a price of 0.82 (CAD) on April 8 and a market cap of 57.79M (CAD).

Critical Elements Corp. (TSXV:CRE) – 
This company is the 100% owner of Rose Lithium-Tantalum spodumene Project, an advanced stage project located in Quebec, Canada. Critical Elements also owns 8 exploration stage projects for Rare Earth Metals including vital battery minerals like cobalt and nickel. The stock’s price was 1.63 (CAD) on April 8 and it has a market cap of 334.59M (CAD).

Argosy Minerals (ASX:AGY) (GR:AM1) (OTCPK:ARYMF) – 
This junior mining company owns the Tonopath Lithium Project in Nevada. It also has a 77.5% interest in the Rincon Lithium Project in Argentina. Argosy’s stock price was 0.50 (AUD) on April 8 and the market cap was 656.06M (AUD).

 

Photo by Kumpan Electric on Unsplash